Referring to FIG. 1, a cellular communications system typically consists of four major components that work together to provide mobile service to subscribers. These components include a public switched telephone network (PSTN) 10, a mobile telephone switching office (MTSO) 20, base stations 30 with antenna systems and mobile subscriber units (MSUs) 40. The PSTN is made up of local networks, the exchange area networks, and the long distance network that interconnects telephones and other communication devices on a worldwide basis. The MTSO is the central office for mobile switching. The MTSO may include a mobile switching center (MSC), field monitoring, and relay stations for switching calls from cell sites to land line central offices (PSTN). The mobile subscriber unit (MSU) is the physical equipment, e.g., a cell phone having a control unit and a transceiver that transmits and receives radio transmissions to and from base stations 30.
The term “cell site” refers to the physical location of the radio equipment or base station that provides coverage within a geographic area referred to as a cell. Equipment located at a base station may include power sources, computers, interface equipment, radio frequency transmitters and receivers, and tower mounted antenna systems. Due to the high costs of obtaining a cell sites and deploying base station equipment, proper selection of cell sites to serve a target market is important to the profitability of a service provider.
The size and location of cells and the corresponding base stations vary depending upon a number of factors including signal propagation and call volume. For example, metropolitan-areas with high traffic may require more base stations operating at lower power levels due to call volume, surface clutter and interference. Less densely populated areas may be covered with fewer base stations operating at higher power levels. Desired signal penetration into buildings and vehicles must be considered. In some instances, distributed antenna systems (DAS) may be utilized to enhance coverage in buildings and other structures.
In the past, many wireless communication service providers focused primarily on geographical coverage rather than capacity utilization. These providers constructed cellular networks with base stations to achieve acceptable coverage over broad service areas. As in the case of landline service, providers relied on rate-insensitive users, typically businesses and high-income individuals, to support the cost of the infrastructure required to provide wireless communications service over relatively broad geographic areas. Service was typically concentrated on metropolitan areas and areas that served roaming traffic that was billed at higher rates.
The relatively high rates charged by such providers limited the potential market for wireless services. The rate plans were based on minutes used, the time of day calls were made, whether the calls were made on weekdays or weekends and incorporated additional charges for roaming. As more features and services became available, the rate plans were adjusted to add incremental charges for the services. As a result, rate plans became more complicated and hard to understand. Often, consumers incurred charges much higher than anticipated. Billing errors became more frequent due to the complexity of the plans. All of these factors tended to limit the market for wireless services.
In order to target price-sensitive customers and customers dissatisfied with receiving unexpectedly high monthly charges, a number of wireless service providers began to offer plans that provided a customer or consumer with a fixed number of minutes for a fixed price. Other plans, referred to as “all you can eat” have offered unlimited usage for a fixed monthly price. In order to provide these rate plans profitably, some providers shifted their focus away from broad geographic coverage to a more targeted approach to providing wireless services.